What are the response tools such as financial sanctions in the United States?

Taiwan World Daily News

According to a research report on BOC Securities of Bank of China investment banks, BOC Securities said that due to the heating up in the U.S. -China tension, the two parties closed the consulate in each other, and the United States may irrational financial sanctions on Chinese banks, and even kicked China out of the international US dollar liquidation mechanism SWIFT system (global peer industry industry industry industry industry.Bank Finance and Telecommunications Association), the Chinese government and Chinese banks must be prepared in advance.If the United States is actually imposed on financial sanctions, what should China have to respond to tools and measures?

The US sanctions against China are directly based on the Uyghur Human Rights Policy Law and the Hong Kong Autonomous Law adopted by Congress.According to these bills, the Trump administration can implement economic sanctions on Chinese and Hong Kong officials involved in the case, prohibiting Chinese -funded institutions from conducting credit transfer or payment with any financial institutions within the jurisdiction of the United States.Bonds, or using Chips to cut off their US dollar and participate in US financial system transactions.At the same time, the United States can also crack down on money laundering, terrorism, selling weapons and drugs, sanction individual Chinese banks, and even remove them from the SWIFT system.

Faced with the possibility of the United States' possibility of financial sanctions in China, banks in the mainland in Hong Kong or banks that provide financial services to Hong Kong politicians are in a dilemma.Because if you obey the decision to the United States, it will offend Beijing; but if it is sanctioned by the United States, the business may be partially paralyzed and affect revenue.

The most important platform for the United States to implement financial sanctions is the international payment settlement system.The international currency and financial systems after World War II were established by the United States leaders. The United States has the global financial infrastructure, and the position of the US dollar in the international settlement system is irreplaceable.The US -controlled New York Clearance Institute Bank Alternative Payment System (Chips) is the world's largest US dollar trading settlement system. It undertakes 95%of the world's bank interbank US dollar payment settlement business and more than 90%of foreign exchange transaction liquidation.As long as any country needs to use US dollars, almost use US financial facilities.

In addition, the United States has a great influence on Swift.Swift is responsible for the settlement of global cross -border transactions, which is the core of global trade and cross -border financial services.Although SWIFT appears to be independent financial institutions in Europe, it depends on the US dollar global settlement system and must abide by the laws of various countries, so it often becomes a tool for the United States to implement financial sanctions.The United States can effectively use financial methods because the United States is the key axis of the global financial system, which is equivalent to bankers in the world.

In response to the increased possibility of US sanctions, the China Banking Securities Report suggested that China can adopt response measures including: 1. Promote cross -border receipt and payment of the Mainland, Hong Kong, and Macau, and use CIPS (RMB cross -border payment system) or develop new system transactions to use it to develop new system transactions to use it to develop new system transactions.Reduce the exposure of international payment information.As for the data gap that causes global international payment information, the total information exchange mechanism can be established with the SWIFT system.

When the US Department of Justice investigated the international oil and gas monopoly in the 1950s, the Britain, the Netherlands, France, Italy and other governments had ordered their parties to submit documents.In May last year, the United States strengthened sanctions on Cuba, and France also used the EU blocking bill to protect the economic activities and investment of French diaspora and enterprises in Cuba.

2. China can formulate the blocking law in a timely manner, and do not recognize the application of unilateral laws in the United States, and break the effectiveness of unilateral sanctions in the United States.China can also strengthen coordination and cooperation with other countries and regions in the specific law enforcement process.

Third, China can unite directors of the Swift institutions to promote the reform of the SWIFT mechanism and restrict the abuse of privileges of the US government to deal with the United States that may kick China out of SWIFT.

4. If the United States is mining -oriented operation, China ’s banking or Chinese sovereign agencies are excluded from the US dollar liquidation system. China can also consider foreign exchange control currency anchor and stop using the US dollar as the main currency of its foreign exchange control.

The problem is that China needs to import a large amount of oil and natural gas. They must be priced and settled by the US dollar. Without SWIFT or USD foreign exchange, it will immediately cause a fatal crisis.

According to various analysis, if the United States excludes bank transactions in China and Hong Kong through the Swift system, it should only be targeted at Chinese banks in Hong Kong without comprehensive sanctions, and will not fully retreat US -funded financial institutions.The target of sanctions should be the Bank of China in Hong Kong, and the banks of mainland China account for half of the Hong Kong financial system in Hong Kong Branch, with a wide range of influence.The United States has not frozen China's US dollar assets inside and outside the United States, but it cannot be ruled out in the future.

Although Beijing can regulate US dollars, banks can also strive for US dollar funds in the market and operate outside the SWIFT system, but the Chinese response ability is actually limited.The CIPS scale of its own international revenue and expenditure settlement system cannot compete with the Swift controlled by the United States. It can only keep the domestic financial circulation and not be paralyzed by SWIFT sanctions.

CIPS is not possible to replace Swift, and the main role is still defense.In the first quarter of 2020, RMB accounted for only 2.02%of global foreign exchange reserve assets.In May, the market share in the international payment market was only 1.79%.It shows that China has a light saying in the international monetary system, is unable to fight against US financial hegemony, or digests the consequences of sanctions.